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(Bloomberg) -- Global banks are pushing ahead with growth plans in Saudi Arabia four months after a crackdown on corruption threatened to derail ambitious plans to transform the economy.

Lenders including UBS Group AG and Goldman Sachs Group Inc. have been hiring and Citigroup Inc. just won its first local advisory mandate since returning to Saudi Arabia after a 13-year absence. Deutsche Bank AG said it’s expanding in the kingdom as the outlook for bond and stock sales improves.

While the speed of the purge and the lack of transparency unsettled markets when it started late last year, the banks appear unfazed after several of the princes and officials who were arrested have since been released. That’s good news for Crown Prince Mohammed bin Salman, who’s trying to solidify his grip on power without alienating the international investors he needs to transform the economy into a financial powerhouse and away from oil.

“Over the medium-term, foreign investors will likely take comfort from the fact that no foreign investor was targeted by the anti-corruption drive,” said Ehsan Khoman, head of research for the Middle East and North Africa at Mitsubishi UFJ Financial Group Inc. In the long run, “we view the anti-corruption drive as a net positive for investors.”

That’s quite a change from November, when the arrests of Prince Alwaleed Bin Talal and other billionaires sent shock waves through the region. The prince’s Kingdom Holding Co. put on hold a plan to raise about $1 billion in loans. Efforts to revive a share sale of Fawaz Alhokair Group’s mall unit were shelved after the accounts of its co-founder were frozen in the crackdown. Local investors in the Middle East’s largest initial stock offering last year reneged on hundreds of millions of dollars on the last day of the sale.

The disruptions fueled speculation how the crackdown would affect the global banks that manage much of the region’s wealth, including UBS, JPMorgan Chase & Co., Credit Suisse Group AG and Citigroup, which counts Prince Alwaleed as a long-term backer. Many lenders had also invested in anticipation of a fee bonanza from what could be the largest IPO in history, the planned listing of parts of Saudi Arabian Oil Co., or Aramco.

“I don’t think the investor sentiment has fully recovered after November,” said Joice Mathew, head of equity research at United Securities in Oman. “Tadawul activity is not picking up as we were expecting, and this is not the type of activity that we should have seen ahead of inclusion into a global index,” he said, referring to expectations for the Saudi stock market.

MSCI Inc. has added the Tadawul, as the country’s stock exchange is known, to its watch list for a potential mid-2018 upgrade to emerging-market status. The Tadawul All Share Index has gained almost 7 percent since early November, but it remains well below levels seen in 2014 and 2015.

If the banks themselves had any concerns about the purge, they brushed them off quickly and went back to business. UBS recently hired former Morgan Stanley banker Gabriel Aractingi to run its ultra-high net worth business in Saudi Arabia from Geneva. Goldman Sachs named Mohammed Al Awad to head its equities business in Saudi Arabia as it prepares to start trading local stocks.

‘Doubling Down’

“It hasn’t affected our plans at all,” Sjoerd Leenart, JPMorgan’s global head of corporate banking and regional head for Central & Eastern Europe, Middle East and Africa, said in an interview. “We are doubling down on our business in Saudi Arabia as the competition is fierce, there are a lot of new entrants. So we’re spending more time there, and putting more people to work to maintain our leadership.”

A spokesman for Zurich-based Credit Suisse said there haven’t been any implications for the Swiss bank’s business. UBS and Citigroup declined to comment.

Deutsche Bank, which is cutting jobs elsewhere, plans to hire in the region to cover sovereigns and large corporates, Jamal Al Kishi, chief executive officer for the Middle East and Africa, said in an interview in Dubai. The German lender has built its team in Saudi Arabia to about 90 people on expectations that the nation’s stock exchange may be upgraded to emerging market status.

“We are definitely more positive on the outlook for deals this year across sovereign bond sales, equity capital markets and privatizations,” Al Kishi said. “We also expect to see a lot of private sector companies tapping markets for both equity and debt.”

The kingdom’s debt management office on Friday announced that it had increased a $10 billion syndicated loan facility by $6 billion, citing an “exceptional response” from both existing holders and new banks.

Among private issuers, budget carrier FlyNas LLC earlier this year picked Citigroup to advise it on its IPO, which is planned for the end of the year or early 2019, people familiar with the matter said last month. That’s the first local mandate for the New York-based bank after it returned to the kingdom. Morgan Stanley and NCB Capital were also appointed to help with the offering.

$100 Billion

Saudi Arabia freed Prince Alwaleed and many others at the end of January. Saudi authorities have said that at least $100 billion had been siphoned from public accounts over decades through corruption and embezzlement. Earlier this year, the authorities said that they had reached settlement agreements valued at more than $100 billion with many of those held in exchange for their freedom. Others are expected to face trial.

Khoman at MUFG says the kingdom could use proceeds from the settlements for more investments, which would be positive for banks. Ayham Kamel, practice head for the Middle East and North Africa at Eurasia Group, a political risk consultancy, said he expects banks to continue applying for licenses in Saudi Arabia, if the government can provide more clarity about its plans.

“The level of commitment to investing in Saudi Arabia remains open to question and will depend of the government’s willingness to clarify its strategy,” Kamel said.